Colorado Tax Defeat A Signal Of Voters' Sour Mood

DENVER -- An off-year tax vote in Colorado this week likely sent a powerful message to policymakers nationwide who are wondering if voters will consider paying more for services they say they want.

The answer: No way.

Voters here resoundingly rejected the only statewide tax hike on ballots this November, a slight temporary increase in sales and use taxes to shore up public schools decimated by years of budget cuts. In all corners of the state Tuesday, Coloradans also swatted down proposed local tax hikes on dozens of local questions on everything from building a new recreational center in a Denver suburb to hiring a second full-time police officer in a small western Colorado town.

National tax critics pounced on Colorado's results as proof that Democrats back tax hikes at their own peril.

"Taxpayers in this battleground are not in the mood for more tax-and-spend sinkholes," wrote conservative columnist Michelle Malkin after the statewide school vote lost.

Even some who expected Colorado's tax vote to fail seemed surprised by how badly it lost. The measure passed in just three of the state's 64 counties; overall it lost by nearly 30 percentage points, an electoral blowout.

"People in Colorado, and people all over America, are generous, decent people. If they have money to put toward something important, they'll spend their money on it. Right now, they just don't have the money. Everyone's hurting, everyone's just trying to hold on," said Colorado Republican Rep. Cheri Gerou, one of the Legislature's budget-writers.

Democratic Gov. John Hickenlooper, who declined to back the schools tax, said after the vote that pinched taxpayers simply aren't ready yet to consider big changes to government, either an expansion of taxes or a big reduction in government services.

"Right now there's a great reluctance" to raise taxes, Hickenlooper said Wednesday. But he said the conversation won't go away.

"It could take quite a while. It could take a couple of years," he said. "You want people to feel fully heard and that they have a sense of ownership in what government looks like."

Still, Colorado's stark results were a shock for tax backers who hoped voters are so tired of lowered public services that they'd be willing to talk about taxes.

"Bottom line, we have a situation where the services people expect for their communities cannot be funded in the current framework," said Carol Hedges, director of the Colorado Fiscal Policy Institute, which pushed unsuccessfully for the statewide school tax.

Colorado has constitutional mandates that require most tax hikes to be approved by voters. The school tax on the ballot Tuesday would have raised individual and corporate tax rates from 4.63 percent to 5 percent and Colorado's sales and use tax rate from 2.9 percent to 3 percent. The rates would have been in effect from 2012 through 2016, with an estimated $2.9 billion in new taxes during that time going to K-12 schools and public colleges.

The Colorado vote came after the state, like many others, ratcheted back school funding in response to declining tax receipts. Lawmakers here cut schools more than $200 million earlier this year, to $2.8 billion. Many school districts have gone to four-day weeks. Others have laid off teachers and increased class sizes.

The director of DU's Center for Colorado's Economic Future, which earlier this year warned of fiscal disaster if the state doesn't make big change, didn't seem surprised by Tuesday's votes. But he predicted voters will agree to changes for state finance – eventually.

"Structural problems take some time to be created, and they take some time to be resolved," Charlie Brown said. "It's a little overwhelming for policy makers right now."

Colorado State University political scientist John Straayer put it even more bluntly.

"This isn't rocket science – the economic and political circumstances are not favorable to these kinds of things," Straayer said of the tax hikes.